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Employers Added 280,000 Jobs in May

The government reported better than average jobs gains, higher labor participation and wage growth, alleviating what had been a dismal first quarter for the U.S. economy.

Employers added 280,000 jobs and the unemployment rate increased to 5.5 percent in May 2015, indicating more Americans returned to the labor force and are actively looking for work, according to the Bureau of Labor Statistics (BLS). At the same time, hourly wages rose 0.3 percent last month.

“The jobs numbers this month are above economists’ expectations in a welcome sign of a spring rebound in employment,” said Jennifer Schramm, SHRM-SCP, manager of workforce trends at the Society for Human Resource Management. “These newest findings offer hope that the disappointing numbers in the first quarter were an anomaly and that the economy is now getting back on track.”

May’s jobs total came in significantly higher than the average monthly gain of 251,000 over the prior 12 months.

Professional and business services added 63,000 jobs in May and 671,000 jobs over the year. Employment continued to trend up in temporary help services (+20,000), in management and technical consulting services (+7,000), and in architectural and engineering services (+5,000).

Employment in leisure and hospitality increased by 57,000 in May, and edged up in arts, entertainment, and recreation (+29,000). Health care added 47,000 jobs, employment in retail trade went up (+31,000), construction employment continued to trend up over the month (+17,000) and truck transportation added 9,000 jobs. The financial industry added 13,000 jobs in May, making the total for the last 12 months 160,000 jobs added.

Mining employment continued to fall, with a decline of 17,000 jobs in May. Employment in mining has decreased by 68,000 thus far this year, after increasing by 41,000 in 2014.

The average workweek for all private-sector workers remained at 34.5 hours in May. The manufacturing workweek was unchanged at 40.7 hours, and factory overtime remained at 3.3 hours. Average hourly earnings for all employees on private payrolls rose by 8 cents to $24.96. Over the year, average hourly earnings have risen by 2.3 percent.

“If wages continue to grow faster than inflation we can expect to see an impact on consumer spending and this in turn will also help the economy,” Schramm said.

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BLS reported that the unemployment rate ticked up to 5.5 percent in May from 5.4 percent the previous month. There were 8.7 million people recorded as jobless in May up from 8.5 million in April. “Most economists are attributing this to increases in new entrants to the labor market, either in the form of new graduates just embarking on their careers or discouraged job seekers coming back into the job market as they see new opportunities to land a position,” Schramm said.

The unemployment rate for adult men (5.0 percent), adult women (5.0 percent), whites (4.7 percent), and Hispanics (6.7 percent) stayed about the same. More blacks (10.2 percent) and teenagers (17.9 percent) joined the unemployment rolls while the rate for Asians dropped from 4.4 percent to 4.1 percent.

The number of people out of work for less than five weeks decreased by 311,000 to 2.4 million in May, following an increase in April to 2.7 million. The number of long-term unemployed (those jobless for 27 weeks or more) held at 2.5 million in May and accounted for 28.6 percent of the unemployed. Over the past 12 months, the number of long-term unemployed is down by 849,000.

Another important indicator of overall labor market health is the participation rate, which has been stuck on low for years. The labor force participation rate rose for the second month in a row to 62.9 percent from 62.8 percent and has remained within a narrow range of 62.7 to 62.9 percent since April 2014. The figure is near the lowest level since the late 1970s.

Individuals categorized as involuntary part-time workers—those seeking full-time employment, but working part time—rose to 6.7 million from 6.6 million. Additionally, 1.9 million people were considered marginally attached to the labor force—unemployed, wanting and available for work, and had looked for a job sometime in the prior 12 months. Among this group, 563,000 individuals were considered discouraged—not currently looking for work because they believe no jobs are available for them. The remaining 1.3 million people marginally attached to the labor force in May had not searched for work in the past month for reasons such as school attendance or family responsibilities, according to BLS.